Online Powerpoints

Online Powerpoints - Online Powerpoints Tax Test 2 Click to...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style 8/8/11 Online Powerpoints Tax Test 2
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8/8/11 28-2 Amount Realized The amount realized from a disposition equals: Cash received Plus FMV of any property received, including buyer’s note Plus the amount of any debt relief Reduced by selling costs such as sales commissions, broker fees
Background image of page 2
8/8/11 38-3 Installment Sale Method Permits deferral of gain recognition until cash is received Gain recognized equals cash received × gross profit percentage (GP%) GP% = gain realized/contract price Interest received on the installment note is taxable
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8/8/11 48-4 Capital Loss Limitation Treatment of excess of capital loss over capital gain (net capital loss) Individuals: Can deduct $3,000 of net loss per year against ordinary income Carryforward remaining loss indefinitely Corporations: No deduction for net loss Carryback three years and forward five
Background image of page 4
8/8/11 58-5 Capital Gains Individuals have preferential tax rates on long-term capital gain (See Chapter 16) Gains and losses from sales and exchanges of capital assets held for more than 12 months are long-term 0%, 15%, 25%, and 28% preferential rates Corporations pay tax at regular rates
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8/8/11 68-6 Depreciation Recapture For sales of depreciable real property: Accelerated depreciation in excess of SL is recaptured Applies only to buildings placed in service before 1987 By 2009, most of these buildings are fully depreciated so no recapture potential Corporations must recapture 20% of
Background image of page 6
8/8/11 78-7 Recapture of Prior Year Net Section 1231 Loss Net 1231 gain is characterized as ordinary income to the extent of unrecaptured Section 1231 losses Unrecaptured Section 1231 loss is a net Section 1231 loss deducted in any of the five preceding taxable years Once a prior year net Section 1231 loss is recaptured as ordinary income, it is no longer an unrecaptured loss
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8/8/11 88-8 Disposition by Abandonment Taxpayer may abandon worthless property by disclaiming any ownership interest in the property Loss recognized equals adjusted basis of abandoned property Loss is characterized as ordinary regardless of the type of asset because there is no sale or exchange
Background image of page 8
8/8/11 98-9 Worthless Securities The abandonment rules do no apply to worthless securities Taxpayers are treated as selling worthless securities on the last day of the taxable year for an amount realized of zero Loss recognized equals adjusted basis of securities
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8/8/11 108-10 Exception for Securities in Affiliated Corporation A corporate parent’s recognized loss on worthless securities issued by a domestic subsidiary is ordinary if the subsidiary is an affiliated corporation Definition of affiliated corporation 80% or more of outstanding stock is owned by corporate parent Subsidiary derives more than 90% of annual gross receipts from the conduct
Background image of page 10
8/8/11 118-11 Disposition by Foreclosure
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/08/2011 for the course ACCT 3843 taught by Professor Kaden during the Spring '09 term at Arkansas.

Page1 / 57

Online Powerpoints - Online Powerpoints Tax Test 2 Click to...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online